Westport AR Design

annual report 2017

25

th

Annual General Meeting Venue : Ballroom 1, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur Date : Tuesday, 25 April 2017 Time : 2.00 p.m.

The softcopy version of Westports Malaysia Annual Report 2017 is available from our website.

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w h at ’ s i n s i d e

01

03

07

HIGHLIGHTS

OUR COMPANY

ACCOUNTABILITY

09 10 12 14

58 60 61

150 Corporate Governance Statement 162 Statement on Risk Management and Internal Control 170 Audit and Risk Management Committee Report

Financial Highlights Marketing Highlights Key Indicators Statement of Value Added and Distribution

02

04 LEADERSHIP

PERSPECTIVE 20 24 28

Corporate Profile Group Corporate Structure Corporate Information

Chairman’s Statement CEO’s Statement Management Discussion and Analysis

64 66 79

Board of Directors Profile of Directors Profile of Management Team

05 ACHIEVEMENTS 80 86

20 Chairman’s Statement

Realising The Value of Going That Extra Mile Past Awards and Recognitions

06 CORPORATE RESPONSIBILITY 92 Community 120 Workplace 129 Environmental 134 Marketplace 140 Sustainability Reporting 142 Corporate Events 144 Media Relations

08 FINANCIAL STATEMENTS 180 185 242 245 260

Directors’ Report Audited Financial Statements Statement by Directors Statutory Declaration Independent Auditors’ Report

09 OTHER INFORMATION 262 264 266 269 •

Additional Compliance Information Analysis of Shareholdings List of Concession Assets Notice of the Twenty-Fourth Annual General Meeting Form of Proxy

Vision To be a successful gateway for the nation’s trade inventory and the pride of the nation in terms of employee relations, customer satisfaction and corporate citizenship.

Mission To achieve 12 million TEUs and 12 million tonnes of cargo by 2020 with excellent returns for employees, shareholders and customers.

Values Teamwork Westports believes in collective and cooperative teamwork which contributes to the achievement of the company’s vision and mission.

Accountability and Integrity Integrity is the bedrock on which trust is built and is the hidden key to success. Employees are embedded with a deep feeling of trust and integrity which provides transparency and positive work environment.

Responsible This tenet is embraced by all employees where we are all responsible for our actions and conduct.

Innovation Westportians develop a passion for excellence and success through continuous innovation of new ideas and practices.

Good Family Values Now Culture Westportians believe the attitude and process of treating key business as if one’s life depended on it. It is about determination to stay focused and committed in delivering positive results. Westports cultivates a great sense of urgency and priority in every employee.

Safety Awareness Safety is an integral part in sustaining our business growth and success leading to an increase in productivity

We work together as a family and practise candour, open communications and solve any issues or problems together. Things are done with good thoughts, good intentions and good deeds. Westports is a big family where everyone is treated with respect.

about westportS

Westports was listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on 18 October 2013.

Westports was included in the Morgan Stanley Capital Indices (“MSCI”) Index on 29 May 2015 and subsequently became constituent of FTSE Bursa Malaysia KLCI (“FBM KLCI”) Index on 22 June 2015.

Westports primarily manages port operations dealing in container and conventional cargo. It also provides a wide range of port services, including marine services, rental services and other ancillary services. Westports is located in Port Klang and it is one of the three main ports in the Straits of Malacca that handle gateway and transhipment container cargo, all of which are located in close proximity to the main shipping route along the Straits of Malacca. These ports have the advantage of natural deep water berths which allow them to accommodate large vessels.

Westports serves as the main gateway for container and conventional cargo for central Peninsular Malaysia hinterland.

Our container business has grown exponentially from 200,000 Twenty-foot Equivalent Unit (“TEUs”) in 1996 to 9.9 million TEUs in 2016. Our market share of container business represents 76% in Port Klang, 17% in Straits of Malacca and 9% in South East Asia as at 2016.

Our success is attributable to our strategic location, deepest channel and wharf, straight line berth, higher productivity, dedicated young and vibrant employees and connectivity to more than 350 ports around the world, amongst others.

We have 28 berths with the length of 7,542 metres, of which 21 berths are connected in a straight line measuring 5,700 metres. Our container handling capacity stands at 12 million TEUs and capacity utilisation ratio is at 83% in 2016. We are in the midst of expanding our capacity to Container Terminal 8.

Our conventional terminal handled 11.1 million tonnes of bulk cargo in 2016. The bulk cargo comprises mixed steel, steel coils, project cargo, animal feed, human consumables, fertilisers, building-related cargo, palm oil, petroleum, chemical and liquefied petroleum gas. It represents 57% market share of conventional cargo handled in Port Klang.

We are connected to the ports around the world through major shipping lines and feeder services.

FAR EAST ASIA

MEDITERRANEAN

1. CHINA - Shenzhen / Nansha / Tianjin / Shanghai / Ningbo / Shekou / Yantian / Chiwan / Qingdao / Xiamen / Da Chan Bay / Dalian / Fuzhou / Xingang / Hong Kong 2. JAPAN - Osaka / Tokyo / Yokohama / Nagoya / Kobe / Yokkaichi / Hakata 3. SOUTH KOREA - Busan / Kwangyang / lncheon / Ulsan 4. TAIWAN - Kaohsiung / Taipei / Keelung / Taichung

1. EGYPT - Suez / Port Said / Damietta / Alexandria 2. ISRAEL - Ashdod / Haifa 3. ITALY - Genoa / La Spezia / Trieste 4. TURKEY - Ambarli / Mersin 5. LEBANON - Beirut 6. MALTA - Malta 7. SLOVENIA - Koper 8. CROATIA - Rijeka

SOUTH EAST ASIA

1.

2.

3.

4.

5.

6.

7.

8.

1. INDONESIA - Belawan / Jakarta / Perawang / Semarang / Surabaya / Benete Bay / Panjang / Buatan 2. MALAYSIA - Pasir Gudang / Tanjung Pelepas / Miri / Bintulu / Kota Kinabalu / Penang / Sibu / Kuching / Sandakan / Tawau / Labuan / Kuantan / Port Klang NP 3. MYANMAR - Yangoon 4. SINGAPORE - Singapore 5. THAILAND - Laem Chabang / Bangkok 6. VIETNAM - Ho Chi Minh / Cat Lai / Hai Phong / Qui Nhon / Da Nang 7. BRUNEI - Muara 8. CAMBODIA - Sihanoukville 9. PHILIPPINES - Manila

AUSTRALASIA 1. AUSTRALIA - Fremantle / Brisbane / Sydney / Melbourne / Adelaide / Darwin / Esperance / Gladstone / Townsville 2. PAPUA NEW GUINEA - Port Moresby / Port of Lae / Rabaul / Madang / Kimbe 3. SOLOMON ISLANDS - Honiara

INDIAN SUBCONTINENT 1. INDIA - Pipavav / Haldia / Chennai / Nhava Sheva / Cochin / Mundra / Calcutta / Visakhapatnam 2. PAKISTAN - Karachi 3. SRI LANKA - Colombo 4. BANGLADESH - Chittagong / Mongla

BLACK SEA 1. RUSSIA - Novorossiysk / Vladivostok 2. UKRAINE - Odessa

MIDDLE EAST 1.

2.

3.

4.

IRAN - Bandar Abbas OMAN - Salalah SAUDI ARABIA - Dammam / Jeddah UNITED ARAB EMIRATES - Khor Fakkan / Jebel Ali / Dubai

WEST AFRICA ANGOLA - Lobito / Luanda BENIN - Cotonou CONGO - Pointre Noire GHANA - Tema IVORY COAST - Abidjan MOROCCO - Tangier NAMIBIA - Walvis Bay NIGERIA - Apapa / Lagos / Onne / Tin Can Island 9. TOGO - Lome

EAST AFRICA 1.

2.

3.

4.

5.

6.

7.

8.

9.

DJIBOUTI - Djibouti KENYA - Mombasa SOUTH AFRICA - Durban / Cape Town MADAGASCAR - Toamasina MAURITIUS - Port Louis MOZAMBIQUE - Beira / Nacala REUNION - Port Reunion SUDAN - Port Sudan TANZANIA - Dar Es Salaam / Zanzibar

WEST EUROPE BELGIUM - Zeebrugge FRANCE - Fos sur Mer / Le Havre GERMANY - Hamburg UNITED KINGDOM - Tilbury / Southampton / Felixstowe 5. SPAIN - Valencia / Barcelona 6. NETHERLANDS - Rotterdam 1.

2.

3.

4.

NORTH & CENTRAL AMERICA 1. USA - Seattle / Savannah / Norfolk / New York / Los Angeles / Oakland 2. CANADA - Vancouver

SOUTH AMERICA 1. ARGENTINA - Buenos Aires 2. BRAZIL - ltapoa / Santos / Paranagua / Rio Grande 3. URUGUAY - Montevideo

About westportS

Connectivity to more than

350 ports worldwide

westports holdings berhad pg 8

2 0 1 7 p e r f o r m a n c e at a g l a n c e

Operational Revenue

RM

1.784 Container Throughput

RM

9.9 RM

million TEUs

EBITDA*

987

million

446

million

return on assets

conventional Throughput

RM

11.1

million tonnes

15.3

RM

14.6

* Earnings Before Interest, Tax, Depreciation and Amortisation ^ Market capitalisation as at 31 December 2016 Note: Certain percentage may not add up due to rounding difference

RM billion

return on equity

30.4

%

PROFIT AFTER TAX

MARKET CAPITALISATION

DIVIDEND PAID

RM

billion

%

626

million

PROFIT BEFORE TAX

RM

752

million

HIGHLIGHTS

1

2

3

4

5

6

7

8

9

Annual Report 2017 pg 9

financial highlights

Group Performance For the Financial Year Ended 31 December

(In RM’000) Revenue

2013 2014 2015 2016 2017 1,492,262

1,712,618

1,562,079

1,681,783

1,982,458

Profit before tax

434,673

517,008

578,781

650,143

751,968

Profit attributable to owners of the Company

359,317

435,305

512,205

504,864

625,993

Shareholders’ equity

1,488,029

1,603,942

1,764,235

1,898,121

2,057,937

Total assets

3,214,425

3,573,984

3,846,122

4,029,555

4,102,460

Earnings per share (sen)

12.0

13.9

15.0

14.8

18.4

Dividend per share (sen)

9.0

9.6*

11.3

11.1

13.8

Dividend payout ratio (%)

75.0%

75.0%*

75.0%

75.0%

75.0%

Return on equity (%)

24.1%

27.1%

29.0%

26.6%

30.4%

Return on total assets (%)

11.2%

12.2%

13.3%

12.5%

15.3%

1,492,262

1,712,618

1,562,079

1,681,783

1,982,458

Profit before tax

434,673

517,008

578,781

650,143

751,968

Profit attributable to owners of the Company

359,317

435,305

512,205

504,864

625,993

Shareholders’ equity

1,488,029

1,603,942

1,764,235

1,898,121

2,057,937

Total assets

3,214,425

3,573,984

3,846,122

4,029,555

4,102,460

Earnings per share (sen)

12.0

13.9

15.0

14.8

18.4

Dividend per share (sen)

9.0

9.6*

11.3

11.1

13.8

Revenue

Dividend payout ratio (%)

75.0%

75.0%*

75.0%

75.0%

75.0%

Return on equity (%)

24.1%

27.1%

29.0%

26.6%

30.4%

Return on total assets (%)

11.2%

12.2%

13.3%

12.5%

15.3%

* Excluding special dividend

westports holdings berhad pg 1 0

M AR K ETING h i g h l i g h t s

Total Container Volume (Million TEUs)

Continuously Outperforming the Industry Growth Rate

Compounded annual growth rate (“CAGR”) of 36% over a period of 20 years.

7.5

8.4

9.1

9.9

2014

2015

2016

2017

CONTAINER IMPORT AND EXPORT VOLUME (MILLION TEUs)

Delivering Nation’s Inventory as Largest Gateway Port in Malaysia

CAGR of 27% over a period of 20 years.

2.2

2.5

2.5

2.5

2014

2015

2016

2017

HIGHLIGHTS

1

2

3

4

5

6

7

8

9

Annual Report 2017 pg 1 1

M AR K ET I N G high l igh t s

Market Share

Port Klang

Straits of Malacca

South East Asia

90% 80%

69%

70%

72%

76%

76%

75%

62%

Continuously Winning Market Share

60%

48%

50% 40% 30%

26%

20% 10% 0

3% 2% 1998

8% 5% 2003

14%

14%

15%

17%

17%

7%

8%

8%

9%

9%

9%

2008

2012

2014

2015

2016

2017

11%

WESTPORTS CONTAINER VOLUME BY REGION

2017

48% 25%

9%

Intra Asia

Asia Europe

Asia Africa

8%

Asia Australia

10%

Others

HIGHLIGHTS

1

2

3

4

5

6

7

8

westports holdings berhad pg 1 2

k e y i n d i c at o r s

CONTAINER VESSEL SIZE

2,900

6,600

8,400

14,100

16,000

18,000

19,100

1996

1999

2006

2011

2012

2013

NOW

TEUs

TEUs

TEUs

TEUs

TEUs

TEUs

TEUs

World leader in productivity with berth capability to accommodate the world’s largest vessels.

30 - 35

mph*

2000 – 20 mph*

12

Mmil TEUs

CONTAINER BERTHS

4.9

km

1996 – 600 m

* mph denotes moves per hour.

DEEPEST DRAFT

HANDLING CAPACITY

CRANE PRODUCTIVITY

1996 – 1.0 mil TEUs

17.5

m

SHIP-TO-SHORE CRANES

55

cranes

1996 – 9 cranes

1996 – 15.0 m

NO. OF VESSELS

9,627

vessels

1996 – 972 vessels

9

2 PERSPECTIVE

1

2

3

4

5

6

7

8

9

Annual Report 2017

c h a i r m a n ’ s s tat e m e n t

“PERSPECTI V E Dear Shareholders,

On behalf of the Board of Directors, it is with great pleasure that I present to you the Annual Report of Westports Holdings Berhad (“Westports” or “the Group”) Chairman’s Statement for the financial year ended 31 December 2016.

CEO’s Statement

022 026

“

Management Discussion and Analysis

030

• Business Operational Review - Container Services - Conventional Services - Marine Services - Logistics and Rental Services - IT Initiatives

030 030 034 035 036 037

• Financial Review

038

• Summarised Group Statements of Financial Positions

043

• 2017 Outlook

044

• Investor Relations

045

• Stock Trading Performance

047

• Risk Profile

049

• Our Strengths

052

pg 1 3

HIGHLIGHTS

1

2

3

4

5

6

7

8

westports holdings berhad pg 1 4

k e y i n d i c at o r s

CONTAINER VESSEL SIZE 2,900 TEUs

1996

“ 6,600

8,400

14,100

16,000

18,000

19,100

1999

2006

2011

2012

2013

NOW

TEUs

TEUs

TEUs

TEUs

TEUs

TEUs

Ruben Emir Gnanalingam Bin Abdullah Chief Executive Officer

Unt eosa nihillu ptasin plique aut aut ernatem cum dolorer epudiciis dolorro dolupta eprorepera cus sequi assitatquas et ut fugia veligniet que inus eliquam eaquas molor ad mi, odignis World leader in productivity with berth capability to accommodate the world’sad largest vessels. dolorpos qui tem quia voluptatusam est verior aut lam.Ullupit uta nimus, torum init qui bea qui ad que ex eos est.

“

quodis alita volent voluptatur, tecestisciis moluptiumquo DEEPEST HANDLING dolumqui ut ommo que eosCAPACITY as pel ipis as eos rendantem ius.

DRAFT Aximus modi nimpernatur aut et es entibeate vel et idipici issunt omnihit im quuntore conetur, entions endunt maximetusdae – 2000 – consedipsus iliassequam everum. 1.0 mil1996 1996 – 15.0 m m TEUs mph* Mmil TEUs 20 mph* CRANE PRODUCTIVITY

30 - 35

12

CONTAINER BERTHS

4.9

km

1996 – 600 m

* mph denotes moves per hour.

17.5

SHIP-TO-SHORE CRANES

55

cranes

1996 – 9 cranes

NO. OF VESSELS

9,627

vessels

1996 – 972 vessels

9

PERSPECTIVE

1

2

3

4

5

6

7

8

9

Annual Report 2017 pg 1 5

c h a i r m a n ’ s s tat e m e n t

“

Dear Shareholders,

On behalf of the Board of Directors, it is with great pleasure that I present to you the Annual Report of Westports Holdings Berhad (“Westports” or “the Group”) for the financial year ended 31 December 2016.

“

westports holdings berhad pg 1 6

ch a i r m a n ’ s s tat e m e n t

“

In 2016, Westports accomplished another milestone by achieving 9.9 million TEUs in container throughput, despite challenges in the world’s economy and shake-ups in the container shipping industry. This solidifies our position as the leading port terminal in Malaysia.

“

MACROECONOMIC REVIEW The global economic growth continued to be lacklustre last year mainly due to the slowdown in China’s economy and low commodity prices. The world’s economy grew by approximately 2.3% in 2016 compared to 2.7% in 2015.

The developed countries registering a growth of 1.6% and emerging markets grew by 3.4%.

The US economy slowed down as a result of lower exports arising from stronger dollar which outweighed higher domestic consumption. The Eurozone suffered sluggish growth due to political risks brought about by Brexit.

Japan’s economy barely grew despite the government’s fiscal stimulus.

China’s economy continued growing at a slower pace, as the country transitioned from an export-oriented economy to a more sustainable, consumption-driven economy. The slowdown in China’s economy reverberated across ASEAN, as many countries count China as their largest trade partner.

Back home, our economy also registered a slower growth of 4.2% in 2016 against

5.0% in 2015. As a trading nation, we were affected by global slowdown in demand for goods. However, our exports were supported by the weaker ringgit against the world’s major currencies.

The shipping industry still faces excess supply in the market arising from capacity expansion in recent years and slower global economy growth than anticipated. As a result, many shipping lines recorded losses and are in consolidation phase through mergers and acquisition; and formation of new shipping alliances to remain afloat.

PERFORMANCE REVIEW As a major transhipment hub, Westports is connected to ports worldwide by main line operators, with transhipment volume comprising 74% of the total container throughput.

Despite the challenging global economy in 2016, Westports managed to chart an exceptional growth rate of 10% in container throughput to 9.9 million TEUs. Transhipment grew by 11% in 2016, while gateway container throughput grew by 4%. Westports also handled 11.8 million tonnes of

conventional cargo, an improvement of 16% compared with the previous year, with liquid bulk throughput increasing by 36% due to the contribution from bunker operations. On the RORO segment, we recorded a volume of 141 thousand vehicles, down by 13%.

Mirroring the increase in volume, Westports’ operational revenue surged by 14% to RM1.804 billion. Our profit before tax increased by 16% to RM755 million, reflecting higher container throughput, the effects of the increase of container tariff in November 2015, lower fuel cost and gain from disposal of investment in quoted shares. Profit after tax increased by 26% to RM637 million.

The detailed analysis of performance is reported in the Management Discussion and Analysis section of this report on page 30 to 55.

PERSPECTIVE

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3

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Annual Report 2017 pg 1 7

ch a i r m a n ’ s s tat e m e n t

operational REVIEW

1.804

RM

billion

2015: RM1.578 Bil.

profit before tax

755

RM

million

2015: RM650 Mil.

market capitalisation

SUSTAINABILITY REPORT Commencing this year, Bursa Malaysia requires public listed companies with market capitalisation of more than RM2.0 billion to disclose a Sustainability Report in the Annual Report. Thus, together with this report, you will find a separate document on Sustainability Report.

We already operate our business in a sustainable manner and our long-term thinking and strategic value creation complement the current emphasis on sustainability. Our phenomenal growth over the past years is testament to our sustainable operating practices that promote sustainable growth. The Sustainability Report is categorised into three main chapters: economic, environment and social.

Under the economic segment, we conduct our business in a transparent manner, emphasising integrity and good governance, and virtually all our employees are local. We also consider environmental conservation when planning and conducting our current and possibly future activities. Our social conduct encompasses close engagement with the community, especially on Pulau Indah where we are located. Employees are provided with an environment that is conducive for working and both customers and suppliers are treated fairly and with respect.

DIVIDEND

14.7

RM

billion

2015: RM14.0 Bil.

Westports has declared two interim dividends for 2016 with the first interim dividend of 7.30 sen per share paid on 23 August 2016 and the second interim dividend of 6.70 sen paid on 8 March 2017 with total dividend of 14.0 sen for the financial year ended 31 December 2016. The dividend paid was in

accordance with our dividend policy of 75% of Profit After Tax.

AWARDS I am delighted to report that during the year, we are the proud recipient of various prestigious accolades in recognition of our contributions towards betterment of the industry, community and business.

We are humbled to be awarded the Industry Excellence Award – Logistic by the Malaysian Chapter of the ASEAN Business Advisory Council at the ASEAN Business Awards Malaysia in May 2016.

This award was to recognise outstanding businesses that have created a positive impact on the growth of the Malaysian economy and helped elevate the country’s image in ASEAN. Our outstanding commitment towards the numerous corporate social responsibility initiatives have also been acknowledged by receiving the Company of the Year Award for the Logistics and Ports Industry in the CSR Malaysia Awards in June 2016. The award recognises the efforts done by Malaysian corporations in contributing positive changes to the livelihood of their surrounding communities.

As a testament to be one of the highly sought after employers in Malaysia, we were recognised as the winner of the Gold Award Employer of Choice 2016.

It was awarded by Malaysian Institute of Human Resource Management in October 2016.

ACKNOWLEDGEMENT On behalf of the Board of Directors, I would like to express my appreciation to Mr. Raymond Pak Ying Law for his contributions during his tenure as an

westports holdings berhad pg 1 8

c e o ’ s s tat e m e n t

“

Dear Shareholders,

On behalf of the management and staff of Westports, it gives me great pleasure as the Chief Executive Officer (“CEO”) to present our performance for the financial year ended 31 December 2016, which has been another recordbreaking year for us.

“

PERSPECTIVE

1

2

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Annual Report 2017 pg 1 9

c e o ’ s s tat e m e n t

“

During the financial year under review, Westports operational revenue improved by 14% to RM1.804 billion with profitafter-tax improving by 26% to RM637 million.

“

OUR PERFORMANCE Westports has always placed utmost priority on our productivity levels whilst delivering best-in-class services to our customers. In 2016, this relentless focus and the combination of a stronger US Dollar have made Westports even more competitive for liners in making us their preferred port of call.

The combined organic growth and ad-hoc calls have boosted the annual container volume handled by Westports to another all-time high of 9.9 million TEUs, registering a 10% growth as compared to the previous year. At the

end of 2016, we have cumulatively handled about 85 million TEUs since the inception of our container operations in 1996.

The non-container or conventional segment also achieved satisfactory throughput growth of 16% in 2016 to 11.8 million metric tonnes. The improvement in volume is attributed to the break bulk and liquid bulk cargo segments.

WIDELY connected to more than

350 ports around the world

During the financial year under review, Westports operational revenue improved by 14% to RM1.804 billion with profitafter-tax improving by 26% to RM637 million. The Group has a net gearing of only 0.35 times even after rewarding shareholders with a 75% dividend payout from our profit after tax and also investing RM490 million in capital expenditure.

HUMAN RESOURCE Westportians are our greatest asset and driving force behind our Group. We have a total headcount of 4,611 Westportians as at December 2016. About 4,039 are operational staff and 572 are support staff. With the exception of 3 expatriates, all our employees are locals.

In 2016, we carried out teambuilding programme for Terminal Tractor Operators (“TTO”) being the single largest category of operator in container segment. The programme’s objective is to motivate and encourage high team spirit amongst TTO, inculcate good values and achieve the Group’s vision and mission.

westports holdings berhad pg 2 0

m a n a g e m e n t d i s c u s s i o n a n d a n a ly s i s

B u sin ess O pe r atio n a l R e vi e w CONTAINER SERVICES Consolidation And Alliances In 2016, the two defining features of the continued evolution of the container shipping industry were the consolidation and formation of new major alliances.

CMA CGM eventually fully acquired NOL, the Singapore-based holding company of the container shipping line APL. The acquisition reinforces CMA CGM’s position as the 3rd largest container shipping line in the world, as measured by carrying capacity. In a governmentled directive, China Shipping Container Lines (“CSCL”) has been merged, and its container operations transferred to China Ocean Shipping Company (“COSCO”) with the new entity emerging as COSCO Shipping, the latter will be China’s flagship carrier. HapagLloyd, the 6th largest container shipping line received shareholders’ approval to fully acquire and merge with United

Arab Shipping Co. (“UASC”) to become the 4th largest global liner. Not to be left behind, the three Japanese lines, Nippon Yusen Kabushiki (“NYK”) Line, Kawasaki Kisen (“K”) Line and Mitsui OSK Line (“MOL”), originating from different keiretsu a century back, also proposed to form a new joint-venture company by mid-2017 to scale up their business operations and to target for operational efficiency savings of $1 billion a year.

Before the year ended, Maersk Line, the world’s biggest container shipping line, has acquired smaller rival Hamburg Süd and the acquisition would boost Maersk Line’s global market share to almost 19%.

The O3 Alliance consisting of CMA CGM, UASC and China Shipping Container Lines Co. (“CSCL”) operated until the end of March 2017. There are another three global container shipping alliances; they are 2M, G6 and CKYHE.

3.4% Refrigerated ISO containers 3.7% Insulated or thermal containers

35.4% Flat rack container

2.6% Tunnel container

0.6% Refrigerated ISO containers

54.3% Dry Storage Container

PERSPECTIVE

2

1

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Annual Report 2017 pg 2 1

m a n a g e m e n t d isc u ssi o n a n d a n a ly sis

ultimately should contribute to improved container freight rates and hence, improved financial strength of these global container shipping lines.

Our Container Volume

shipping alliances, OCEAN, THE and 2M, and they contribute more than threequarter of the global container shipping carrying capacity.

Container Shipping Industry The container shipping industry witnessed certain positive developments that would augur well for the remaining lines in the medium term. The orders placed for new container vessels fell to a recent record low after many years of high order placements. Nevertheless, the pipeline for delivery of container ships in 2016 was still high due to orders placed much earlier in the previous years.

As a result of this, the deployment of newly built container vessels, including Ultra Large Container Vessel (“ULCV”) introduced into the long-haul AsiaEurope services, still led to an imbalance whereby the supply of container carrying capacity still outpaced the moderate demand growth for container shipments.

The very competitive container freight rates contributed to Hanjin Shipping’s predicament whereby the 7th largest global line eventually became bankrupt.

In the meantime, financiers and creditors extended their support to Hyundai Merchant Marine to financially restructure the Korean-based line.

The deployment of more ULCV into Asia-Europe services and also the

commencement of the widened Panama Canal saw a cascading effect whereby larger vessels were subsequently deployed in most services, including the Asia-Trans Pacific as well as Asia Africa services. This resulted in an imbalance between additional carrying capacity arising from larger container vessels and moderate demand growth contributed to very competitive container freight rates.

The sustained modest global GDP growth helped global container shipping lines to deliver more container boxes in 2016. However, despite carrying greater volume, improved profitability remained elusive to most liners. Fortunately, the lower bunker price has helped to ease the overall cost pressure for global container lines. Against the backdrop of carrying higher volume and registering higher revenue levels but still achieving a lacklustre amount of profitability, the top-tiered global container lines selected to attain even greater economies of scale by having mergers, acquisitions and jointventures. In their ongoing quest for ever better global-level economies of scale and vessels utilisation, container shipping lines remained as cost-conscious as ever.

Lower orders in 2016 would translate to a much more modest supply of new container vessels in the coming years as the expected improved equilibrium

Westports has achieved another consecutive year of record container volume by handling 9.9 million TEUs in 2016; this is an increase of 10% over the previous year’s volume of 9.1 million TEUs. Transhipment containers were higher by 11% at 7.3 million TEUs while gateway containers grew more moderately by 4% to 2.6 million TEUs. Of the total volume of 9.9 million TEUs, transhipment containers constituted 74% of the containers handled while gateway containers made up 26% of the remaining balance.

Container Throughput

2017

2016

%

Transhipment

7.3

6.6

+11%

Gateway

2.6

2.5

+4%

Million TEUs

Total TEUs

9.9

9.1

+10%

TEUs over Berth – ‘000

2.02

1.98

+2%

TEUs over STS – ‘000

180

175

+3%

Capacity utilisation

83%

83%

-

The above results underpinned our confidence in delivering sustainable productivity and the importance of keeping our equipment in reliable condition. Key equipment used are as follows: Key Equipment

2016

2015

Numbers Ship-to-Shore Cranes

55

52

115

115

Variable Speed RTG

36

30

Hybrid RTG

12

12

513

476

26

27

Normal RTG

Terminal Tractors Stackers

PERSPECTIVE

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westports holdings berhad pg 2 2

m a n a g e m e n t d isc u ssi o n a n d a n a ly sis

sto c k t r a ding pe r fo r m a nc e Share price and Volume Traded Chart Share Price (RM)

Number of shares (million) 180

4.50

160 140

4.20

120 100

3.90

80 3.60

60 40

3.30

20 3.00

Jan 16

Feb 16

Mar 16

Apr 16

May 16

Volume

Jun 16

Jul 16

Aug 16

Highest (RM)

Sep 16

Oct 16

Nov 16

Dec 16

0

Lowest (RM)

Westports Share Price Performance VS FBMKLCI Index Share Price (RM)

FBM KLCI Index

Westports share price

FBM KLCI Index

Dec 16

Dec 16

Nov 16

Oct 16

Nov 16

Oct 16

Sep 16

Sep 16

Aug 16

Aug 16

Aug 16

Jul 16

Jul 16

Jun 16

Jun 16

1,550

May 16

3.60

May 16

1,600

Apr 16

3.80

Apr 16

1,650

Mar 16

4.00

Feb 16

1,700

Mar 16

4.20

Feb 16

1,750

Feb 16

4.40

Jan 16

1,800

Jan 16

4.60

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3 c o r p o r at e p r o f i l e

Our Company was incorporated in Malaysia under the Companies Act, 1965 as a private company limited by shares on 27 April 1993. The Company is principally involved in investment holding and the provision of management services to our subsidiary, namely, Westports Malaysia Sdn. Bhd. (“WMSB�).

We commenced our business on 1 August 1994 and converted from a private company limited by shares to a public company limited by shares on 26 April 2013.

OUR CO M PANY

WMSB was incorporated on 24 January 1990 under the Companies Act, 1965 as a private limited company under the name of Kelang Multi Terminal Sdn. Bhd. and its principal activity is port development and management of port operations.

WMSB assumed its present name on 29 December 2006.

Corporate Profile

058

Group Corporate Structure

059

Corporate Information

060

g ro u p co r p o r at e st r u c t u r e

One (1) Special Share The Ministry of Finance Incorporated

Westports Holdings Berhad

100%

Westports Malaysia Sdn. Bhd.

westports holdings berhad pg 2 4

“

Tan Wei Chun Head of Port Planning

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“

quodis alita volent voluptatur, tecestisciis moluptiumquo dolumqui ut ommo que eos as pel ipis as eos rendantem ius.

Aximus modi nimpernatur aut et es entibeate vel et idipici issunt omnihit im quuntore conetur, entions endunt maximetusdae consedipsus iliassequam everum.

OUR COMPANY

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Annual Report 2017 pg 2 5

c o r p o r at e p r o f i l e

Our Company was incorporated in Malaysia under the Companies Act, 1965 as a private company limited by shares on 27 April 1993. The Company is principally involved in investment holding and the provision of management services to our subsidiary, namely, Westports Malaysia Sdn. Bhd. (“WMSB�).

We commenced our business on 1 August 1994 and converted from a private company limited by shares to a public company limited by shares on 26 April 2013.

WMSB was incorporated on 24 January 1990 under the Companies Act, 1965 as a private limited company under the name of Kelang Multi Terminal Sdn. Bhd. and its principal activity is port development and management of port operations.

WMSB assumed its present name on 29 December 2006. g ro u p co r p o r at e st r u c t u r e

One (1) Special Share The Ministry of Finance Incorporated

Westports Holdings Berhad

100% Westports Malaysia Sdn. Bhd.

OUR COMPANY

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westports holdings berhad pg 2 6

c o r p o r at e i n f o r m at i o n

b oa r d o f d i r ec to r s Tan Sri Datuk Gnanalingam A/L Gunanath Lingam (Executive Chairman) Tan Sri Dato’ Nik Ibrahim Kamil Bin Tan Sri Nik Ahmad Kamil (Independent Non-Executive Director) Tan Sri Ismail Bin Adam (Independent Non-Executive Director) Dato’ Abdul Rahim Bin Abu Bakar (Independent Non-Executive Director) Dato’ Yusli Bin Mohamed Yusoff (Independent Non-Executive Director) Ip Sing Chi (Non-Independent Non-Executive Director) Ruben Emir Gnanalingam Bin Abdullah (Chief Executive Officer) Chan Chu Wei (Non-Independent Non-Executive Director) Jeyakumar Palakrishnar (Independent Non-Executive Director) Kim, Young So (Independent Non-Executive Director) Ruth Sin Ling Tsim (Non-Independent Non-Executive Director) John Stephen Ashworth (Alternate Director to Ip Sing Chi and Ruth Sin Ling Tsim, both NonIndependent Non-Executive Directors)

Audit and Risk Management Committee Dato’ Yusli Bin Mohamed Yusoff (Chairman) Tan Sri Dato’ Nik Ibrahim Kamil Bin Tan Sri Nik Ahmad Kamil (Member)

Auditors KPMG PLT Level 10, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan Tel : +603 - 7721 3388

Registered Office Dato’ Abdul Rahim Bin Abu Bakar (Member)

Nomination, Remuneration and Corporate Governance Committee Tan Sri Dato’ Nik Ibrahim Kamil Bin Tan Sri Nik Ahmad Kamil (Chairman)

Lot 6.05, Level 6, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan Tel : +603 - 7720 1188 Fax : +603 - 7720 1111

Principal Bankers Malayan Banking Berhad AmInvestment Bank Berhad

Dato’ Abdul Rahim Bin Abu Bakar (Member)

Standard Chartered Bank Malaysia Berhad Alliance Bank Berhad

Dato’ Yusli Bin Mohamed Yusoff (Member) Jeyakumar Palakrishnar (Member)

Company Secretaries Tai Yit Chan (MAICSA 7009143) Tan Ai Ning (MAICSA 7015852)

Registrar Boardroom Corporate Services (KL) Sdn Bhd Lot 6.05, Level 6, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan Tel : +603 - 7720 1188 Fax : +603 - 7720 1111

CIMB Bank Berhad OCBC Bank (Malaysia) Berhad

Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad Stock Code: WPRTS 5246

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leadership Board of Directors

064

Profile of Directors

066

Profile of Management Team

079

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westports holdings berhad pg 2 8

“

Ruben Emir Gnanalingam Bin Abdullah Chief Executive Officer

Unt eosa nihillu ptasin plique aut aut ernatem cum dolorer epudiciis dolorro dolupta eprorepera cus sequi assitatquas et ut fugia veligniet que inus eliquam eaquas ad molor ad mi, odignis dolorpos qui tem quia voluptatusam est verior aut lam.Ullupit uta nimus, torum init qui bea qui ad que ex eos est.

“

quodis alita volent voluptatur, tecestisciis moluptiumquo dolumqui ut ommo que eos as pel ipis as eos rendantem ius.

Aximus modi nimpernatur aut et es entibeate vel et idipici issunt omnihit im quuntore conetur, entions endunt maximetusdae consedipsus iliassequam everum.

Annual Report 2017 pg 2 9

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westports holdings berhad pg 3 0

profile of directors

name

position

age

gender

nationality

TAN SRI DATUK GNANALINGAM A/L GUNANATH LINGAM

Executive Chairman

72

Male

Malaysian

1

Tan Sri Datuk Gnanalingam was appointed as Director of the Company on 1 January 2009 and as Executive Chairman of WMSB, the wholly-owned subsidiary of the Company in 2000. Prior to that, he was the Managing Director of WMSB from 1995 to 1999.

Tan Sri Datuk Gnanalingam attended the Royal Military College from 1960 until 1964 before obtaining his Bachelor of Arts Degree from University of Malaya in 1968. He has also attended the Advanced Management Programme at Harvard Business School in Boston, US in 1983.

Tan Sri Datuk Gnanalingam started his career with the British American Tobacco group in 1968 as a sales representative with the marketing division before being promoted as Marketing Director in 1980.

In 1988, he started his own marketing company called G-Team Consultants Sdn Bhd which acted as the Corporate Consultant for the marketing operations of Radio Television Malaysia from 1988 to 2000. He successfully secured the concession to operate Westports in 1994.

He was recognised for his efforts when he was named Transport Man of the Year in 2001 by the Ministry of Transport, Malaysia. In 2007, he received the Small and Medium Enterprise (SME) Platinum Award, the Chartered Institute of Logistics and Transport (“CILT”) Malaysia Achiever of the Year Award and was admitted as a Chartered Fellow by the CILT, UK. He was also presented with the Outstanding American Alumnus Award 2007 in the field of Logistics and

Transport by the American Universities Alumni Malaysia for outstanding entrepreneurial skills and leadership excellence.

He sat on the National PEMUDAH committee, which is a special task force set-up by the then Prime Minister of Malaysia to facilitate businesses in Malaysia by identifying improvements to existing government processes and regulations based on global benchmarking reports and public feedback, from 2007 until 2012. He was re-appointed to the National PEMUDAH committee in 2014. In March 2015, he was appointed a member of the National Export Council.

Tan Sri Datuk Gnanalingam is the NonExecutive Director and shareholder of Pembinaan Redzai Sdn Bhd (“PRSB”), a substantial shareholder of the Company involved in management services including port management. He, however, does not handle the day-today operations in PRSB. His interest held in PRSB does not affect his contribution to the Company.

His eldest son, Ruben Emir Gnanalingam, is the Chief Executive Officer of the Company.

LEADERSHIP

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Annual Report 2017 pg 3 1

profile of directors

name

position

age

gender

nationality

TAN SRI DATO’ NIK IBRAHIM KAMIL BIN TAN SRI NIK AHMAD KAMIL

Independent NonExecutive Director

74

Male

Malaysian

2

Tan Sri Dato’ Nik Ibrahim Kamil was appointed to the Board on 7 September 1994. He obtained a Bachelor of Science Degree in Economics and Business Administration from Georgetown University, Washington D.C., US in 1966. He has more than 49 years of managerial and business experience in various industries ranging from mining, petroleum, media, manufacturing, merchant banking and finance, stock broking, port management, trading to golf resort development.

He started his career in 1966 as an Assistant Company Secretary with Associated Mines Sdn Bhd which is principally involved in tin mining.

Subsequently he joined Shell Malaysia Ltd in 1967. In 1971, he joined The New Straits Times Press (Malaysia) Berhad (“NSTP”) as an Assistant General Manager and was with the company until 1991 where his last position held was as the Managing Director of the NSTP group.

Since then, he has been appointed to the board of many public and private companies. He was a Director of Camerlin Group Berhad (now known as Adjuvant Resources Berhad), Chairman of Southern Investment Bank Berhad, Chairman of QSR Brands Berhad and

Chairman of KFC Holdings (Malaysia) Berhad. He is currently the NonExecutive Chairman of OCB Berhad and Executive Chairman of LionGold Corp Ltd, a company listed on the catalyst board of the Singapore Stock Exchange.

He also sits on the board of several other private limited companies.

Tan Sri Dato’ Nik Ibrahim Kamil currently serves as the Chairman of the Nomination, Remuneration and Corporate Governance Committee and a member of the Audit and Risk Management Committee of the Company. He has no family relationship with any director or major shareholder of the Company nor has he any conflict of interest with the Company.

LEADERSHIP

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westports holdings berhad pg 3 2

profile of management team

LIM BENG KEEM

LEE MUN TAT

AHMAD DAMANHURY BIN IBRAHIM

Chief Financial Officer Malaysian, Male, Aged 61

Head of Commercial Malaysian, Male, Aged 45

Head of Port Projects Malaysian, Male, Aged 49

Lim Beng Keem joined the Westports Group in 1996 as General Manager - Finance, before opting for early retirement in 2009 after 13 years with the Company. He was involved in the Company’s financial related matters. In November 2010, he took an overseas assignment with Hutchinson Ports Holding Limited as Chief Financial Officer until April 2013. He re-joined our Group in November 2013 as Head of Internal Audit where he was responsible for overseeing our Company’s internal audit function before being moved to re- join the Finance Department as Acting Chief Financial Officer (“CFO”), in June 2014.

He was promoted to CFO on 1 December 2015.

Lee Mun Tat joined the Westports Group in May 2003 as a finance manager and assumed his present position in July 2007.

Ahmad Damanhury joined Westports in July 1995 as a civil engineer and assumed his present position in July 2007. He is currently responsible for the port civil infrastructures and facilities maintenance, port expansion projects besides other technical feasibility studies.

He holds a Management Accountancy Degree from the Chartered Institute of Management Accountants (“CIMA”) in 1981. He has been a Fellow member of the CIMA since 1995 and a member of Malaysian Institute of Accountants (“MIA”) since 1988. In 2000, he attended the Senior Management Development Programme (“SMDP”) organised by the Harvard Business School Alumni Club of Malaysia in collaboration with senior faculty members of the Harvard Business School, Boston, US. Mr. Lim has 33 years of experience in the field of accounting and finance.

He started his career as an accountant in Paper Products (M) Bhd in 1981 and later joined Sincere Leasing Sdn Bhd in 1983. He subsequently joined Dimet (Malaysia) Sdn Bhd as the Commercial Manager in 1987 followed by Innpower Electronics Sdn Bhd in 1989 as the Group Accountant.

He holds a Bachelor of Business with a major in Accounting Degree from Edith Cowan University, Australia. He is a member of the Certified Public Accountants (“CPA”) Australia and the Malaysian Institute of Accountants (“MIA”). He attended the Senior Management Development Programme (“SMDP”) organised by the Harvard Business School Alumni Club of Malaysia in collaboration with senior faculty members of the Harvard Business School, Boston, US in 2004. Mr. Lee has also attended the General Management Programme (“GMP”) in Boston US in 2016 and he is an Alumnus of the Harvard Business School.

Mr. Lee has more than 10 years of experience in commercial affairs. He was attached to Matsushita Electronics Components (M) Sdn Bhd from 1995 to 1996 as an accounts executive, Jutajaya Holdings Berhad from 1997 to 2001 with the last position of finance manager and All Best Furniture (M) Sdn Bhd from 2001 to 2003 as the group’s finance manager.

As the Head of Commercial, he is responsible for business development, terminal service contracts, pricing, statistics, credit control and customer relationship. He oversees corporate finance, legal, insurance and plays an active role in investor relations.

He holds a Degree in Civil Engineering from Syracuse University, New York, US, a Diploma in Port Management from the University of Cambridge Local Examinations Syndicate and a Masters of Science in Facilities Management from the University of Technology MARA. He is a member of the Institution of Engineers Malaysia, Board of Engineers Malaysia and Project Management Institute (PMI), US. He attended the Harvard Business School’s Senior Management Development Programme (“SMDP”) organised by the Harvard Business School Alumni Club of Malaysia in collaboration with senior faculty members of the Harvard Business School, Boston, US in 1998.

Encik Ahmad has more than 21 years’ experience in civil and marine engineering works. His notable accomplishments in Westports include the introduction of container yards pavement substructures alternative design and corner slabs stacking yard which are cheaper, faster to construct and easy to maintain.

Prior to joining the Westports Group, he worked with a project management company involved in the planning and construction of the PLUS and Metramac highways projects. Thereafter, he was attached to a consultancy firm from 1992 to 1995 as a design and project engineer involved in the Subang Airport Redevelopment project and the Kuala Lumpur International Airport (“KLIA”) project.

6 SUSTAINABILITY REPORT

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Annual Report 2017 pg 3 3

s u s ta i n a b i l i t y r e p o r t

In the 22-year illustrious history of Westports, one of the reasons for our success as Malaysia’s main transhipment and gateway port is our close relationship with stakeholders, as well as our sustainable approaches to business.

This relationship is one that is based on mutual trust and respect to each other’s role and contribution to the larger ecosystem. From day one, we have been engaging with our stakeholders, Community 092 namely the community, Workplace 120 workplace, environment with low income, old folks and orphans organised free medical check-ups andEnvironmental 129 marketplace. with a monthly subsistence allowance for them by bringing them over to

C o r p o r at e Responsibility

Marketplace 132 of RM300. Currently, 7 families are Westports’ Community Clinics by our

COMMUNITY

Sustainability Reporting

Ever since we made Pulau Indah as our Events homeCorporate in 1994, we strive to ensure that the rest of the community, especially the Media Relations Orang Asli, old folks, orphans and single mothers are not left behind. We firmly believe that as the economic pie in Pulau Indah grows, it should be shared among the community.

Our community initiatives focus on poverty eradication, enhancing education, refurbishment of community facilities, and contribution to the welfare of the Orang Asli, as well as ensuring safety and security in Pulau Indah.

PoverTy eradIcaTIon

1. Free medical check-up for old Folks

For the old folks of Pulau Indah, we

own ambulance. Many of the old folks could not make it to town to get regular check-ups because of their condition which restricts movement.

2. cash assistance for the old Folks

Besides creating thousands of direct and indirect employment in Pulau Indah, Westports as the largest employer within the island has taken the responsibility of helping to improve the livelihood of many of the low income community.

Although there are an increasing number of employment opportunities available on the island now, there are still pockets of the community which need a helping hand.

One of the initiatives that we have committed ourselves to in our effort to eradicate poverty in Pulau Indah is the providing subsidies to single mothers

recipients of this programme. During festive seasons,134 we also provided ‘goodie bags’ containing food and essentials.

136  While the women 146 are cleaning up the inside of the house, the men are flexing their muscles cleaning up the surrounding area 3. House refurbishment and upkeep Some houses belonging to low income families have also been refurbished to provide a better living environment for the family members. A house in need of repair in Kampung Sungai Pinang, Pulau Indah occupied by a disabled mother and her three children was repaired and refurbished by our Engineering Team, leveraging on their skills and expertise in civil, electrical and hydrography engineering.

westports holdings berhad pg 3 4

“

Christoph Zilian Sustainability Analyst

Unt eosa nihillu ptasin plique aut aut ernatem cum dolorer epudiciis dolorro dolupta eprorepera cus sequi assitatquas et ut fugia veligniet que inus eliquam eaquas ad molor ad mi, odignis dolorpos qui tem quia voluptatusam est verior aut lam.Ullupit uta nimus, torum init qui bea qui ad que ex eos est.

“

quodis alita volent voluptatur, tecestisciis moluptiumquo dolumqui ut ommo que eos as pel ipis as eos rendantem ius.

Aximus modi nimpernatur aut et es entibeate vel et idipici issunt omnihit im quuntore conetur, entions endunt maximetusdae consedipsus iliassequam everum.

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Annual Report 2017 pg 3 5

C o r p o r at e R e s p o n s i b i l i t y

In the 22-year illustrious history of Westports, one of the reasons for our success as Malaysia’s main transhipment and gateway port is our close relationship with stakeholders, as well as our sustainable approaches to business.

This relationship is one that is based on mutual trust and respect to each other’s role and contribution to the larger ecosystem. From day one, we have been engaging with our stakeholders, namely the community, workplace, environment and marketplace.

PoverTy eradIcaTIon 1. Free medical check-up for old Folks

COMMUNITY Ever since we made Pulau Indah as our home in 1994, we strive to ensure that the rest of the community, especially the Orang Asli, old folks, orphans and single mothers are not left behind. We firmly believe that as the economic pie in Pulau Indah grows, it should be shared among the community.

Our community initiatives focus on poverty eradication, enhancing education, refurbishment of community facilities, and contribution to the welfare of the Orang Asli, as well as ensuring safety and security in Pulau Indah. Orang Asli, as well as ensuring safety and security in Pulau Indah.

For the old folks of Pulau Indah, we organised free medical check-ups for them by bringing them over to Westports’ Community Clinics by our own ambulance. Many of the old folks could not make it to town to get regular check-ups because of their condition which restricts movement.

need a helping hand. One of the initiatives that we have committed ourselves to in our effort to eradicate poverty in Pulau Indah is the providing subsidies to single mothers with low income, old folks and orphans with a monthly subsistence allowance of RM300. Currently, 7 families are recipients of this programme. During festive seasons, we also provided ‘goodie bags’ containing food and essentials.

2. Cash assistance for the old Folks Besides creating thousands of direct and indirect employment in Pulau Indah, Westports as the largest employer within the island has taken the responsibility of helping to improve the livelihood of many of the low income community. Although there are an increasing number of employment opportunities available on the island now, there are still pockets of the community which

3.0 2.5 2.9 1.5 1.0 0.5

‘14

‘15 Gross

‘16 Net

westports holdings berhad pg 3 6

C o r p o r at e R e s p o n sibi l i t y

“...provide comfortable and safe place for the students and teachers, allowing them to focus on their studies.”

Meanwhile, a collaboration between the Finance Department, Port Police, Container Team D and the Engineering Team has cleaned up and refurbish a house lived by an elderly couple in Pulau Indah. The couple’s son expressed his gratitude towards our staffs for helping him to refurbish his parents’ house, and wish to participate in Westports CSR programmes to repay the deeds. reFurBISHMenT and uPgradIng oF coMMunITy FacILITIeS 1. Refurbishment of KaFa Integrasi Kampung Perigi nenas In September this year, 15 of our engineers have volunteered to refurbish the toilet building at KAFA Integrasi Kampung Perigi Nenas, Pulau Indah to provide a safe and comfortable environment for the children there. The engineering team has got together and upgraded the toilet’s sink outlet to avoid blockage, clearing two toilets blockage,

internal and external wall paintings, replacing doors and cisterns, as well as upgrade the ablution areas with new piping system and water taps.

effort would enable the students and teachers of Tadika Islam Nur Jannati to be able to study in a more comfortable environment.

2. Refurbishment of Tabika Kemas Baitul Zafri, Kampung Sungai Kembong

All these voluntary efforts by Westports staffs show our commitment to giving back to the community. To us, no effort is too small to make an impact to the living standards of the community in Pulau Indah.

The Engineering department has also repaired the facilities at Tabika Kemas Baitul Zafri, Kampung Sungai Kembong, Pulau Indah to provide comfortable and safe place for the students and teachers, allowing them to focus on their studies. The Chairman of Tabika Kemas Baitul Zafri Committee and all members expressed their gratitude to the Westports engineering team for the effort to repair and refurbish the facilities of the kindergarten.

3. Cleaning up of Tahfiz Pulau Indah Our employees have also volunteered to help with the upkeep of Tahfiz Pulau Indah, Kampung Asli.

4. Repair and maintenance of electrical equipment of Tadika Islam nur Jannati Our engineers put their skills for a social cause with the replacement of ceiling fans of Tadika Islam Nur Jannati, and repairing the electrical boxes and switches of the fans. This

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Annual Report 2017 pg 3 7

events

u

annual general meeting

Westports’ 23rd AGM was held on 26 April 2016 at the Sime Darby Convention Centre

u

conventional

Official launching of Phase 1 of Container Terminal 8 on 28 April 2016 by then Secretary General of the Ministry of International Trade and Industry, Tan Sri Datuk Dr. Rebecca Fatima Sta. Maria.

u

westport staff training

Official launch of Westports’ own multipurpose hall, the Dewan Budaya T.A.N.S.R.I.G. on 20 September 2016.

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westports holdings berhad pg 3 8

events

u

safety training

Westports’ Second Container Gate was launched by Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed on 6 October 2016.

u

Terminal Tractor Operators TEAMBUILDING

Teambuilding programme for Terminal Tractor Operators (“TTO”) held between March and October in Felda Residence Trolak, Perak.

8 financial statements

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Annual Report 2017 pg 3 9

directors’ report

f o r t h e y e a r e n d e d 3 1 d e c e mb e r 2 0 1 6

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2016.

Principal activities

The Company is principally engaged in investment holding activities and provision of management services to its subsidiary, whilst the principal activities of the subsidiary are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results

Group Company RM’000 RM’000

Profit for the year

636,981

450,147

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year under review other than disclosed in the financial statements.

FINANCIAL STATE M ENTS

Dividends

Since the end of the previous financial year, the Company paid: i)

a second interim ordinary dividend of 5.78 sen per ordinary share totalling to RM197,098,000 in respect of the financial year Directors’ Report 2015 on 2 March 2016; and 180 ended 31 December

Audited Financial Statements

185

ii) a first interim ordinary dividend of 7.30 sen per ordinary share totalling to RM248,930,000 in respect of the financial year ended 31 December 2016 on 23 August 2016.

Statement

by Directors 242

Statutory Declaration Subsequent to the financial year end, on 8 February 2017 the Directors declared a second interim ordinary243 dividend of 6.70 sen per ordinary share on the issued and paid-up share capital in respect of the financial year ended 31 December 2016.

Independent Auditors’ Report

244

No final dividend was paid during the financial year and the Directors do not recommend any final dividend to be paid for the financial year under review.

westports holdings berhad pg 4 0

“

Lim Beng Keem Chief Financial Officer

Unt eosa nihillu ptasin plique aut aut ernatem cum dolorer epudiciis dolorro dolupta eprorepera cus sequi assitatquas et ut fugia veligniet que inus eliquam eaquas ad molor ad mi, odignis dolorpos qui tem quia voluptatusam est verior aut lam.Ullupit uta nimus, torum init qui bea qui ad que ex eos est.

“

quodis alita volent voluptatur, tecestisciis moluptiumquo dolumqui ut ommo que eos as pel ipis as eos rendantem ius.

Aximus modi nimpernatur aut et es entibeate vel et idipici issunt omnihit im quuntore conetur, entions endunt maximetusdae consedipsus iliassequam everum.

financial statements

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directors’ report f o r t h e y e a r e n d e d 3 1 d e c e mb e r 2 0 1 6

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2016.

Principal activities The Company is principally engaged in investment holding activities and provision of management services to its subsidiary, whilst the principal activities of the subsidiary are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results

Group Company RM’000 RM’000

Profit for the year

636,981

450,147

Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year under review other than disclosed in the financial statements.

Dividends Since the end of the previous financial year, the Company paid: i)

a second interim ordinary dividend of 5.78 sen per ordinary share totalling to RM197,098,000 in respect of the financial year ended 31 December 2015 on 2 March 2016; and

ii) a first interim ordinary dividend of 7.30 sen per ordinary share totalling to RM248,930,000 in respect of the financial year ended 31 December 2016 on 23 August 2016.

Subsequent to the financial year end, on 8 February 2017 the Directors declared a second interim ordinary dividend of 6.70 sen per ordinary share on the issued and paid-up share capital in respect of the financial year ended 31 December 2016.

No final dividend was paid during the financial year and the Directors do not recommend any final dividend to be paid for the financial year under review.

westports holdings berhad pg 4 2

s tat e m e n t s o f f i n a n c i a l a s at 3 1 d e c e mb e r 2 0 1 6

Note

Non-current assets Property, plant and equipment

Concession assets Investments in subsidiary

Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

4 1,515,397 1,369,283 - 5 2,074,114 1,920,752 - 6 - - 1,030,130 1,030,130

Total non-current assets 3,589,511 3,290,035 1,030,130 1,030,130 Current assets Investment in securities Trade and other receivables Cash and cash equivalents

7 8 9

- 339,056 420,510

103,165 240,182 396,173

- 5 15,195

103,165 9 1,331

Total current assets 759,566 739,520 15,200 104,505 Total assets 4,349,077 4,029,555 1,045,330 1,134,635 Equity Share capital 10 Share premium Reserves

341,000 697,000 1,030,925

341,000 697,000 860,121

341,000 697,000 7,219

341,000 697,000 23,249

Total equity 2,068,925 1,898,121 1,045,219 1,061,249 Non-current liabilities

Borrowings Employee benefits Deferred tax liabilities Service concession obligation

11 1,150,000 1,150,000 - 12 9,037 10,302 - 13 308,142 288,475 - 14 337,341 368,876 - -

Total non-current liabilities 1,804,520 1,817,653 - Current liabilities Trade and other payables 15 Provisions 16 Tax payable Service concession obligation 14

269,937 165,030 9,130 31,535

149,298 96,014 38,507 29,962

70 - 41 -

73,386 -

Total current liabilities

475,632

313,781

111

73,386

Total liabilities

2,280,152

2,131,434

111

73,386

Total equity and liabilities

4,349,077

4,029,555

1,045,330

1,134,635

The notes on pages 191 to 241 are an integral part of these financial statements.

financial statements

1

2

3

4

5

6

7

8

9

Annual Report 2017 pg 4 3

n o t e s t o t h e f i n a n c i a l s tat e m e n t s

Westports Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows: Principal place of business P.O. Box 266 Pulau Indah 42009 Port Klang Selangor Darul Ehsan Registered office Lot 6.05, Level 6, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan The consolidated financial statements of the Company as at and for the financial year ended 31 December 2016 comprise the Company and its subsidiary as disclosed in Note 6 (together referred to as the “Group” and individually referred to as “Group entities”).

The Company is principally involved in investment holding and the provision of management services to its subsidiary, whilst the principal activities of its subsidiary and its effective ownership interests are as stated in Note 6 to the consolidated financial statements. There has been no significant change in the nature of these activities during the financial year.

These financial statements were authorised for issue by the Board of Directors on 8 February 2017.

1. Basis of preparation

(a) Statement of compliance The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The following are the accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company: MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 • • •

Amendments to MFRS 12, Disclosure of Interests in Other Entities (Annual Improvements 2014-2016 Cycle) Amendments to MFRS 107, Statement of Cash Flows – Disclosure Initiative Amendments to MFRS 112, Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses

Westports Holdings Berhad (262761-A) P.O. Box 266, Pulau Indah, 42009 Port Klang, Selangor Darul Ehsan, Malaysia.

Tel : +603-3169 4000 Fax : +603-3169 4119

www.westportsholdings.com